Hochwald strengthens German dairy capabilities with opening of US$208M plant in Mechernich

GERMANY – Hochwald Foods, the third-largest dairy company in Germany, has opened a €200million (US$207.79M) facility, described as the ‘dairy plant of the future’ located on a 21.5-hectare property in Mechernich.

The plant whose construction started three years ago has 60,000 square meters of floor space and a total of 17 different bottling lines.

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In addition, provision for future growth and the increased capacity that this would require has been taken into account with the opportunity to add bottling plants to the operation, the company said.

When fully operational, Hochwald revealed that it will turn 800m kilograms of raw milk per year into 1.4billion packages of value-added products including long-life milk, long-life cream, long-life milkshakes, and condensed milk.

Production started to be phased in at the site in January as the company gradually re-located processing from its Erftsadt plant.

The German dairy said all the processes are ‘perfectly matched with each other and ‘extensively’ automated and digitalized, setting new standards.

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CEO Detlef Latka said: “We set our strategic direction in line with the current and future requirements of the market five years ago.”

 A core element of this was the construction of a highly efficient and future-orientated plant – precisely what we are opening today.”

According to Thorsten Oberschmidt CFO at Hochwald, since the facility was developed from a greenfield site, the project faced both an ‘advantage’ and a ‘challenge ‘.

The advantage is in the sense that the responsible people could perfectly picture the resource flows in the new buildings and a challenge was, with such an investment, Hochwald wanted to retain certain flexibility for future market developments.

The investment and commissioning of the facility come at a time when the German dairy is poised for growth due to rising disposable incomes, increasing population, and growing health consciousness.

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Also, increasing product diversification, rising demand from the consumers, and increasing demand for organic products will drive the growth.

Expert Market Research projects the dairy market in Germany which attained a value of about US$25.5 billion in 2020, to grow at a CAGR of 0.9% during the forecast period of2022 to 2027.

The market research firm adds that the dairy market growth in Germany is being majorly driven by the rising health consciousness among the consumers, thus, leading to rising demand for healthier dairy products like unprocessed cheese.

Soft cheese and other protein-rich dairy products are also witnessing growth in the country due to the decreasing meat consumption in the region and in the coming years, the market is expected to be driven by the rising demand for organic and GMO-free dairy products, the firm stated.

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